At the start of the interview, Buffet said several key people helped salvage the financial system by acting decisively - Paulson, Geithner, Bernanke and Sheila Bair, head of the FDIC. Would it have been so hard to name all four rather than just the men?

8:15 am February 10, 2010

metalpipe wrote :

Sure, the unemployment rate might have soared to 25% (rather quickly), but proper investment of the TARP funds and the (ongoing) bank and real estate bailout funds would have given small and mid size businesses the capital they needed to bounce back. Investment in new breakthrough technologies would have ensured a stable recovery, creating millions of jobs. Our crumbling infrastructure could have been renewed, saving hundreds of thousands of jobs and stimulating the economy.

Buffet is way out of line praising these dopes. They have effectively flushed our wealth down the toilet, and doomed the middle class of America to a slow and painful death.

8:22 am February 10, 2010

metalpipe wrote :

And further, the reason Paulson has little worry about a drop in the dollar is because he knows it is inevitable and going to be extreme. Anything off that particular topic is I am sure a relief for his royal genius of financial wizardry. Anyone not owning some amount of silver and gold right now has not done their homework. Fixed income assets, indeed.

8:25 am February 10, 2010

ted in portland wrote :

I just watched an interview with Paulson on CNN. I am amazed.

I'm a lifelong Republican, a believer that government should set the rules, but otherwise stay out of private enterprise. My question for Mr. Paulson: Why did you wait until 2008 to take steps to prevent this catastrophe from reaching the brink?

The legislation which enabled your friends on Wall Street to create these enormous liabilities was passed by a Republican Congress under Bill Clinton in 1999-2000. At the time, the risks of allowing companies to become "Too Big To Fail" were well known. The regulations preventing them had been in place for nearly 70 years, before a bi-partisan coalition in Congress wiped them all off the books. There was even a follow-on bill proposed, The Commodities ReAuthorization Act, which was supposed to clear up the regulatory gaps (created by the Commodities Futures Modernization Act), to provide oversight of OTC derivative trading. This was tabled for six years by a Republican controlled Congress, and when finally passed in May of 2008 by a Democratic Congress, it explicitly excluded the authorities the CFTC would require in order to monitor the risks associated with derivatives traded on the OTC markets.

There was also massive evidence accumulating as early as 2005 that sub-prime mortgages were defaulting at a higher rate than anticipated, as well as evidence of irregularities at Fannie and Freddie underwriting these mortgages. All of this evidence was publicly available. Numerous expert analysts (Wall Street insiders) raised questions about the risks associated with this rapidly expanding use of Main Street investment capital, and published them on-line and in trade publications. Did you bother to read any of that? Shouldn't a man with your expertise have been able to connect the dots: huge potential liabilities and dependencies between our largest financial institutions?

But it sounds like you're saying you had no idea that this massive threat was building until it was too late to call your friends on Wall Street and encourage them to take remedial action. If anyone could be expected to anticipate a threat to the US economy of this magnitude, wouldn't it be a Treasury Secretary who ran the biggest and most successful Investment Bank for a period of decades?

Obviously, faced with an impending economic catastrophe, we in the electorate are forced to rely upon our public officials to act quickly and decisively. But in the end, considering the outcome today, the only ones who have actually sustained irretrievable losses are those of us on Main Street who's assets were lost, and the country at large which has seen a massive increase in it's debt and other liabilities. The people which engineered this debacle, are still in their jobs, and still extracting hundreds of billions in bonus compensation from the US economy. Those of you who's job it was to prevent that from happening are either still in office, or writing self-congratulatory books on how you saved our country on the brink of disaster.

As I see it, what we have witnessed on the part of Wall Street, the Congress and three administrations strongly resembles what Bernie Madoff did, but on an exponentially larger scale. The only difference? He admitted to what he did, and now he's in jail. You, and your colleagues are still enjoying your exorbitant wealth and privileged lifestyles. Why shouldn't we be angry? Why aren't you in jail?

10:04 am February 10, 2010

MC wrote :

What amazes me about this whole thing is no one bothers explaining WHY this happened in the first place. These banks should never have been in a position where they could have brought down the whole economy. Paulson's comment about Merrill not lasting a week: Why should I care if an investment bank goes bankrupt? Similarly, if the Chinese and Russians had sold a bunch of Fannie Mae bonds and securities - again, why should I care? Why is it that the Chinese, the Russians, and investors in bank and Fannie Mae debt must be made whole? I am not invested in those securities, and neither are most of the American people.

One thing that I still do not understand AT ALL is why these banks' financial positions deteriorated so quickly? House prices declined, what, 30% at most; not even, in most markets? Even if these banks' balance sheets were 100% invested in mortgage-related securities, why should a modest drop in housing prices be capable of bringing down the banks and by extension, the entire American economy? When did the United States as a country become an investment vehicle tied to housing prices? It just doesn't make any sense.

Buffett is quick to praise these people for their reactionary measures, and he knows why he's doing that, I have no doubt, but I don't understand why there aren't more questions being asked about how and why this was n't prevented from happening in the first place, so that reactionary measures wouldn't have been necessary? For example, yes, it's great that Bernanke guaranteed money market funds, but shouldn't he shoulder some blame for doing nothing to prematurely burst what was a housing bubble obvious to most Americans, let alone Wall Street high fliers and renowned economists?

5:15 pm February 15, 2010

another dead soldier wrote :

Buffett's love fest with Hank Paulson was sickening. I guess Buffett thinks one of the criminals knee deep in the financial disaster deserved big smiles and soft ball questions. The good old boy we are both financial geniuses treatment reminded me of how the financial community always prospers in wars while ordinary men, whom the rich call the little people, die. I guess Buffett made out OK in the latest financial disaster profiting on the backs of the poor and middle class; so he naturally considers Paulson a friend. In the modern world you're a financial genius if you profit from corrupt financial manipulation and bail outs from the taxpayers. At least regular bank robbers are not hypocrites like Paulson and his banker/Wall Street friends.

5:31 pm March 3, 2010

Just another taxpayer wrote :

Buffett liked the bailouts and praised them as he is a very large shareholder of goldman Sach's who benefited from AIG's bailout indirectly. If you look at all of these big money guys and our tops gov't officials a common thread seems to be Goldman Sach's. Could there be a conflcit of interest. Who cares whos democrat or republican, wake up America.

7:43 pm March 3, 2010

Scott wrote :

I'll have to agree with Just another taxpayer....Buffet and Berkshire would have lost a lot with no bailout. So they would rather pass that on to the American Tax Payer instead. "Less Painful". When are we going to come to our senses and let the free market work? I would like to see Warren Buffet up in the face of these failing Wall Street Jugernauts demanding the results and finding new ways to safely manage his investments!!!!....and Berkshires Investments!!! There would be a different temperature on Wall Street if they had the big money breathing down their neck. I would venture to say that the Wall Street bonuses would be a bit lower if we had let the market work. and as far a Paulson stating that China and Russia were about to dump our debt...(excuse my ignorance)..but who was going to buy it????

7:53 pm March 3, 2010

Scott wrote :

I can clarify for you Anonymous if you can be specific.

7:55 pm March 3, 2010

John in BHM wrote :

"Ted in Portland", completely brilliant, you hit the nail on the head brother.

2:19 am March 4, 2010

Paul A. Dugas - San Diego wrote :

It's too bad that Buffett sold his soul to the devil and preaches like he helped save the world by bailing out Goldman Sachs. It's easy too make money when you have money which is why anybody with any sense knows that the rich have gotten really richer in this financial crisis. The middle class has practically been wiped out and the poor never had anything to lose. Now he's in bed with the same guys who ran the Treasury and Goldman into the ground and sings praise as they buy your home loans at 70% and 58% on the dollar and then foreclosure or shortsale your home and make money on the transaction all insured by warranty's by the FDIC at the face amount of the loan, not what they paid for it. It's criminal! That's why the FDIC is broke now and the Treasury/taxpayers (we) are going to pay for it. They can't lose and that's why they are making money now. That's not the same Buffett that started Berkshire. His talk about Philantrophy is lip service. Buffet, where is your sense of morality and righteousness? If you really want to fix the Economy call me and I'll explain an ethical and moral way YOU CAN DO IT!

4:34 pm March 10, 2010

Wess Coaster wrote :

It is rather evident that the few who benefit the most from the American economy are those who get to make the rules. Public losses but private profits.

The health care industry is making the rules as we speak. If the bill passes they get new customers subsidized by tax payments from the middle class. If the bill fails, insurers get to kick more people off their list who are "unprofitable" and raise rates on those few who can afford to stay. Either way they are going to increase profits.

Washington is no longer a place that represents the interests of voters. Washington is a place that brokers the interests of wealthy global investors and multinational corporations.

I now look at America as not a nation of free citizens but more as the worlds financial clearing house and bully for the globally wealthy backed by a gigantic military incase anything goes wrong. Oh yeah, and that military is served by and funded by American citizens who have zero imput.

What should we expect? Our system was founded upon Capitalism. The truth is that capitalism/greed/centralized power is becoming a global game with very few players since soviet communism failed and world the became flat. Our founding fathers could not have ever imagined this.

12:50 pm January 20, 2011

BackToSchool wrote :

Scott wrote:
"If you think things are bad in today’s economy, count your blessings that a key group of decisive leaders were at the reigns of power ..."
No, the king REIGNS. His coach driver holds the REINS. Sorry to RAIN on your parade!

2:50 pm August 8, 2011

john wrote :

We save the big banks, yet allow them to keep the bailout money in their reserves instead of lending it out to
get the economy moving. This is the same government that Could have AND should have used that money to rebuild aging infrastructure that needs to be rebuilt anyway (thousands of construction jobs) and/or to give some meaningful money to Katrina survivors (levee failures fault of the FEDS) to rebuild their lives and boost the economy in the Gulf coast region. As a mlitary vet, I keep wondering how IN THE WORLD did we ever become a superpower with such a dysfrunctional government?

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